SHANGHAI -- Top shareholders in Suning.com including founder Zhang Jindong look to sell as much as one-quarter of the company, the Chinese retailer said Thursday, as the coronavirus pandemic dampens earnings.
Zhang and parent Suning Appliance Group, which together own about 40% of Suning.com's outstanding shares, are in talks to sell a total interest of 20%-25% to buyers in areas including infrastructure. That could leave Suning.com with a different top shareholder.
The negotiations were made public in a disclosure to the Shenzhen Stock Exchange, which halted trading in Suning.com shares. The retailer aims to release details of the talks and have the block removed within five trading days.
A deal would raise cash for a company said to be struggling financially as an expansion strategy centering on bricks-and-mortar shops backfires. Suning in late January projected a net loss of 3.4 billion yuan ($527 million) to 3.9 billion yuan for 2020. Its mainstay home appliance stores and supermarkets have suffered as the virus weakens sales at physical shops.
Suning's founding family, including Zhang, in December pledged all outstanding shares in Suning Holdings Group as collateral for a 1 billion yuan loan from a unit of Alibaba Group Holding. The e-retail giant is Suning.com's second-largest shareholder, with a 19.99% stake.
Speculation arose in December, mainly in online media, that Suning could default on debt payments, which the company immediately denied. But some industry watchers say the company's strategy of growth through rapid expansion of its convenience store chain and acquisitions of rivals is contributing to the financial woes.
Suning Holdings acquired Inter Milan, one of Italy's most storied soccer clubs, in 2016. Tokyo-listed duty-free store operator Laox was brought into the group in 2009.